A Spiral Evolution of Traders and Merchants into Entrepreneurs

According to Matt Ridley, “The Rational Optimist”, humans have always been traders.  He traces cultural advances as a direct result of surpluses created by trade among specialists.  At the simplest Tribal level (Purple), Ug, an inept hunter, makes superb arrowheads and axes which he trades to better hunters for meat and hides.  Such trade was often confined within small bands of 100-200 people who knew each other and were genetically related.  Ridley thinks selling of excess daughters to neighboring bands was a method of extending trade outside the band with less risk. 

We think of Red civilizations as Viking raiders and Roman legions, bent on plunder and tribute, rather than trade.  Yet, while Troy, Sparta and Persia warred, Phoenician traders invented the alphabet and carried their civilization across the Mediterranean, on to Britain and south around Africa.  Their descendants are in Lebanon and Syria.  Likewise, archeologists see physical evidence of huge pre-European trading routes throughout the Americas in the spread of Clovis points and sea shells. Australian aborigines show similar exchange routes.

A more interesting example of Red traders is the Rus.  These were eastern Scandinavians who traded east instead of raiding to the west as did the Danes and Saxons.  Using the great rivers of what is now Russia, and moving south into the Balkans, they established trade routes with the Greeks and Arabs and even handled Asian goods.  Legends say that Russia was created when the local Slavic tribes saw the skill of the Rus and asked them to become their kings, creating order from the chaos of warring tribes.  This is exactly what Graves describes when he points out that Purple (Slavic tribes) creates problems it can’t solve, while the more sophisticated Rus (Red) already had solutions available to those Purple problems. 

We see something similar with Native Americans when the Cherokee, ready for Blue, almost instantly took up European farming practices.  When a civilization is ready for a solution, it is often quick to adapt an idea from one level up trading partners.  The plains tribes, on the other hand, ready for a Red solution, took to the horse and followed the Red warrior model of Mongols and Cossacks, becoming, “the finest light cavalry in the world.” 

Now, we shouldn’t romanticize any of these peoples.  They were no more enlightened than the Mesoamericans who ripped the hearts from living sacrifices.  The Rus traders were heavily engaged in the slave trade and were such excellent warriors (mercenaries) that they served as the elite personal bodyguards of Byzantine Emperors for centuries.  In their defense, they traded through regions with hostile tribes much like today’s Afghanistan, where sane people still go heavily armed and expect to defend themselves.  More importantly, Robert Kegan’s work explains why these civilizations seem so cruel.  Like current adolescent minds that bully, they absolutely lack any ability to take another’s perspective, especially the perspective of the villagers they are raiding or the slaves they are taking.  Their world is just slaves and masters and anyone with the capability to be a master would certainly have the good sense to become one. 

Similarly, what Don Beck and Said are saying about the contemporary manifestation of Purple/Red values of trade in places like South Africa and the Middle East is that these cultures have not experienced the natural emergence into higher values of commerce in patterns similar to the West. The Blue stage in the evolution of trade is one that takes decades, if not centuries to develop. It is on that solid platform that the Orange values of the fifth level system evolve. The West has had four centuries since the beginning of the Industrial Revolution to develop its current capacities for trade into Orange entrepreneurism. Cultures like South Africa and the Middle East have only been exposed to these values for less than a century. In value-systems studies when it comes to commerce, cultures that are centered in Purple/Red and are rich in natural resources repurpose memes from the West to make their presence in the primitive value-systems more comfortable. This reality ignores the fact that abuses inherent in the Purple/Red system, such as the belief that “God placed these natural resources at our tribe’s disposal” (Purple), and “I have to defend my wealth by all means possible” (Red) continue to manifest unabated. Without an indigenous BLUE development plan by a visionary government or scaffolding by NGOs, these practices often lead to toxicity in the system that manifests in an ever-increasing gap between the haves and have-nots. In worse cases, it projects the penned up Red energy into terrorist activities and revolutions. The West has played its fair share in perpetuating these practices by supporting brutal RED regimes that can secure the supply lines to natural resources, while aiding in the repression of the culture. Only now are better practices evolving to the point where the West is able to understand that without helping these regions develop Blue trade values, Purple poverty and Red exploitation will remain the primary challenge facing non-advanced economies.  Commerce is the key to peaceful development and Orange entrepreneurism is not the model of commerce that fits at this level of existence.

Successful trade requires excess production capacity of a good that trading partners cannot produce at the same cost/quality level.  It also requires the “traders” themselves, who, once a culture had reached red, were seldom the producers, because you couldn’t travel to do the trading while sitting at home producing.  Hence, at Red, trading is more specialized with a skilled producer, a roving peddler and a needy consumer who is also a skilled producer of a good desired in other locations.  At a slightly more sophisticated Red or Red/blue, money replaces barter so that traders can buy from or sell to those who don’t have an immediate need for an item that happens to be in the trader’s inventory.  When barter is entirely replaced by money, a Merchant (Blue) commerce evolves.  When working in Purple and Red cultures, be very wary of how money may contaminate this system as it circumvents more natural barter transactions. 

What does production for trade look like in Purple/red cultures?  For women, it is often based on sale of handcrafted items.  Individual women may produce items in their home which are then sold to outsiders by male family members or by outside exploiters.  In many cases, modern production equipment can greatly increase output, hence the use of microloans to finance a small piece of production equipment for an individual trader.  However, the individual micro-loan is not the optimal starting point if the culture is heavily Purple (community, not individual based).

For example, if you look at successful American homesteaders moving into the industrial age, you see that individual farmers did not purchase their own equipment.  A single, expensive machine was used by the whole community, and entire communities joined in ensuring efficient sun-up to sun-set usage of the machine as planting or harvest moved from farm to farm.  It wasn’t until the 1960’s that individual farmers were conned into borrowing heavily to purchase individual machines and rural communities suffered because there was no longer bonding over shared work.

Therefore, we think that in a Purple culture a better-fit model than microloans will be supplying a women’s community center with shared production equipment.  This allows higher utilization rates than individual ownership and honors the need for community ventures in such a culture.  Katie C. has worked with church-supported models doing this work in Latin America.  Don and Elsa are attempting to provide community water to support agriculture in the Middle East.  These models work well to jump start the vMemetic growth of a community, but you must have an exit strategy.  Self-sufficiency, education and exposure to Western culture will all conspire to move individuals out of the Purple cooperation space into Red, me-me-me space.  We recommend instituting formal rituals and rites of passage into your program to direct this natural growth into a positive expression.

Historically, Red has two expressions. 
Budding Red self-importance causes an individual to feel a need to take over control of the group and, if thwarted by the Purple community, that can lead to bullying or even expropriation of the production equipment. 
In healthy male cultures, Red became the “protectors” of the village, as personified in the Roman legend of Horatio at the Bridge.  Your design must be carefully planned to channel young women into the modern version of this protector role.  Historically, young men go through rites of passage (kill a lion) to prove they are ready for such a role.  You will need to carefully design a similar rite of passage requiring proof of mastery of appropriate skills for the women in your program. 

In trading societies, Red protectors deal with the outside world on behalf of the tribe, while women, children and elderly remain safe at home.  Hence, the natural model is where a male family member sells the women’s production.  This becomes toxic when a woman is ready to take on that outside-facing role but is prevented by hostile males.  Hence, an Afghani girl is shot for wanting an education.  In some Middle Eastern cultures it will be necessary to ensure that women who are ready to take on a trader role for their community are allowed to deal with female counterparts for the sake of placating a tradition that requires maintaining their “purity”.  You will need to help build local traditions that support women growing into more mature, agentic roles without threatening their traditional community values. 

After the initial set up of a successful community production facility for women with someone from your group or a male villager handling trade, you will need an explicit program to groom the women to step up to bigger roles as their Red develops.  What is most straight forward is to develop a ritual that requires an education component to the program.  Formal education in rural schools was how peasant immigrants to the US went from illiterate laborers and substance farmers to able production workers to college graduates in three generations.  For example, if the group is sewing goods for sale, first teach how to use the modern machines.  Then, teach how to maintain a sewing machine.  That, of course, will require learning to read the directions and to write the maintenance history.  The next obvious lesson is in managing the cost and price of your goods, so you learn math and bookkeeping.  This gives the developing individualistic mind a long series of opportunities to demonstrate merit, to show the patience needed to master harder and harder tasks, and to gain self-respect and community respect for that mastery.  Perhaps the final task is to develop enough fluency in your trading partner’s language to dispense with an interpreter.  All of these constructive tasks can create rituals that allow a healthy outlet for budding Red’s need for competition and attention.  In short, you carefully sculpt a “hero’s quest” for women in your program.  Those who pass, then have the option of becoming teachers, “master” producers, repair experts, or traders, all roles that fit Red’s need for personal attention, self-respect and direct reward as an individual.  These new rituals can also slowly displace more destructive rituals, such a selling child brides. 

If you happen to be starting with a Red male group, you plan the same constructive “hero’s quest,” geared to whatever production roles are most appropriate in the microenvironment.  Hence, Don’s directing of South African gang youth into physical production and then competitive sales of a simple manufactured item.  A “real man” wins by selling the most.  Note, traders do NOT engage in large-scale enterprise.  The maximum size of a production/trader network is usually a few dozen.  If you try to scale up over 100 at this level, you get sweat shops!

Innovation prone Red traders, when exposed to Western business cultures, think they can become entrepreneurs, but totally lack any perspective on the needs of a modern marketplace.  That means you will constantly need to direct their thinking towards those practical market needs they have the capacity to actually produce now (e.g. Don suggests a cement factory in Palestine, not chip manufacturing – yet).  Unfortunately, these won’t be cool or get-rich-quick items.  This is where you will begin to help them develop Blue qualities of persistence, future thinking, and quite frankly the old Protestant work ethic (BLUE!) that built large parts of the US.  Again, training in bookkeeping, production planning, market analysis, etc. will all help them get the discipline to actually run a real business, while providing an outlet for their Red competitiveness.  The learning you must instill here is that a person must master skills, learn to follow the rules and think long-term in order to be a business person (Blue structure is key here).  When they master those skills, they next become merchants, not yet entrepreneurs. 

Merchants are simply those with enough capacity for Blue order and structure to engage in very large scale trade.  They understand future value and long-term ventures.  They write down structured agreements on how trade will be carried out.  So as you build commerce into Blue, the key factor is setting clear rules that require fair trade and protect all stakeholders.  It is at this point that you provide structure that helps minimize corruption. You will need to write these rules for them at first, since exit red/Blue has trouble remembering that members of the other tribe deserve fair treatment also.  Unfortunately, our Western history of exploitation provides a poor model for developing countries.  Even as the East India Company plundered, they very carefully made the natives sign formal trade agreements.  In a Blue world, where one’s position is ordained by God, it just never occurred to them that a trade agreement should be fair or that you shouldn’t force trade at gunpoint.  You are going to seed memes of honesty, fairness, stakeholder rights, tolerance, safe working conditions, fair (not equal) pay, zero waste, respect for God’s (Allah’s/Elohim’s) earth, etc. into the developing system as fundamental Blue values that will stand inviolate.  These are the memes that Said finds have disappeared in America over the last 30 years, to our great detriment.  Healthy Entrepreneurism can only grow out of soils fertilized with these common values of honest exchange.  Israel is ready for it, Palestine is not – yet.

Developing healthy Blue in the face of competing Religious intolerances is extremely difficult, as we see daily in the friction among fundamentalists worldwide.  American entrepreneurs need to be brutally honest with the rest of the world and with our own disadvantaged.  There is a price an individual must pay for prosperity.  Prosperity costs education; it costs tolerance for beliefs of your trading partners; it cost leaving some dysfunctional cultural beliefs behind. We need to say clearly that we no longer make money the old-fashioned way, via exploitation and corruption.  Entrepreneurs create wealth by using our creativity, our hands, our resources and our capital in an efficient, effective, productive and most importantly fair manner.  We seek first to create real, demonstrable value in the world through the work of self-investment, and prosperity follows.  Get-rich-quick schemes just create bubbles that will eventually destroy the world economy. 

Using commerce to help peoples climb the spiral to a better, more peaceful life isn’t easy and it’s not a one-size fits all process.  Thus, careful analysis of where a people are now and helping them plan a path to a better future is critical.  We shouldn’t expect them to be able to do it for themselves yet.  Our job is to assist them in developing the capacity for commerce as appropriate to their current value system and then to plan a path forward to grow their capacity to engage in more sophisticated commercial activities, with our scaffolding. 


Kegan, Robert (1994). In Over our heads: The mental demands of modern life. Cambridge, MA: Harvard University Press

*Clare Graves, The Never Ending Quest Dr. Clare W. Graves Explores Human Nature; Christopher C. Cowan & Natasha Todorovic, Eds.

§ Beck, Don, and Christopher Cowan, Spiral Dynamics: Mastering Values, Leadership, and Change, Blackwell, Oxford, 1996.

±Centers for Human Emergence – www.che-hub.com






Copyright 2013, Third Coast Complexity Consultants

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